China pledges $46 billion for Pakistan, but will Beijing deliver?

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Much is being made of Xi Jinping's visit to Pakistan and the reported US$46 billion worth of deals being signed. This visit has been a long time in the making. It is the first visit to Pakistan by a Chinese president for nine years, and this one was itself delayed repeatedly.

A long list of MoUs have been signed between the two governments. Pakistan is in dire need of infrastructure and power generation, and China is well positioned to support this. China is increasingly concerned about unrest and terrorist activity on its borders, and views economic development as one key way to address it (this is its philosophy in restive Xinjiang province as well). Pakistan is being promoted as the first step in China's Silk Road initiative.

Like all large Chinese financing announcements, though, we should be wary of counting the chickens before they hatch. Many previous pledges of support have not been delivered. According to a RAND study (cited by Andrew Small in his book The China Pakistan Axis), of the $66 billion of financial assistance China pledged to Pakistan from 2001 to 2011, a mere 6% actually eventuated. As I've noted before, it is crucial to follow the money and not assume that announcements of Chinese largesse will all end up happening.

For sure, the announcements are politically important for both sides, and they are no doubt partly designed to demonstrate to the US that China can step in where Washington has failed to deliver. But implementation remains a challenge. As many development partners have found, security problems can delay or derail economic initiatives in Pakistan. So we should take note of this announcement, but remain sceptical that the full $46 billion will be delivered.